The most enduring and destructive superstition about American politics is that the president is “in charge of” the economy, and so it was no surprise to hear Hillary Rodham Clinton yesterday say that she’d put her husband “in charge of revitalizing the economy.” As my colleague Charles C. W. Cooke points out, this is an example of “talismanic” thinking, that what makes the world go ’round is having the tribal chieftain do that voodoo that he does so well.
There are some obvious problems with this line of thinking, the main one being that it is complete and utter undiluted poppycock.
The Clinton-era boom was in no small part a continuation of the Reagan-era boom, which was, like the performance of the economy under previous and subsequent presidents, only partly a product of the president’s economic philosophy and policies. Two of the great economic-policy successes of the Reagan era — the taming of inflation and the bundle of reforms generally described as “deregulation” — were rooted in Carter-era policies. Ronald Reagan knew enough to understand that enduring the recession engineered by Paul Volcker and the Fed was necessary to wring inflation out of the economy, but he wasn’t terribly happy about it, and neither were voters: Reagan’s approval ratings were at 41 percent at the end of 1982, and his unpopularity cost Republicans a couple seats in the House. At the beginning of 1983, Reagan’s job-approval number was down to 35 percent. But in May of 1980, inflation had been 14.4 percent; in May of 1986, it was 1.5 percent, and Reagan’s approval number roughly doubled.
The performance of the economy is only partly a product of the president’s economic philosophy and policies.
“Inconclusive” is the conclusion more often than not in these kinds of debates. The federal budget was in surplus (“primary surplus”) toward the end of the Clinton administration, as Mrs. Clinton points out. Why? Partly because of tax increases that Republicans fought vigorously against; partly because of spending controls that Democrats fought vigorously against; partly because of a stock-market bubble that liberated both the Clinton administration and congressional Republicans from making some really tough decisions.
Mere coincidence doesn’t actually tell a very good story for the Clinton administration: During the last quarter of his predecessor’s presidency, real GDP growth was 4.33 percent; during the last quarter of Clinton’s presidency, it was down to 2.89 percent and plunging. By September 2001, U.S. GDP growth was down to less than one-half of one percent and by the end of the year growth was only 0.21 percent. Maybe you think that was the lingering effect of Clinton policies; maybe you think Bush policies took an immediate effect; maybe you think it was other events (there was some economic disruption in September of 2001). In general, the people who know the most about these issues have the least certain opinions on that.
Mrs. Clinton insists that when it comes to revitalizing a national economy, her husband is the man who “knows how to do it.”
Still, Mrs. Clinton insists that when it comes to revitalizing a national economy, her husband is the man who “knows how to do it.” Certainty in these matters is always suspect: It wasn’t long ago that David Sirota and the geniuses at Salon were hailing “Hugo Chavez’s economic miracle” in Venezuela, which has been reduced to utter primitivism by socialism. And the Right is vulnerable to this kind of thinking, too: When challenged about the difficulty of achieving sustained real GDP growth comparable to that of the Reagan era, my friend Larry Kudlow declared: “I did it before, and I’ll do it again.” He was being funny — a little bit funny — but he and others who share his views do assume a rather more linear and immediate connection between policy changes and broad economic outcomes than seems to be warranted by the facts.
Those ideological positions may be unnecessarily narrow and oversimplified, but they are magnificent intellectual achievements compared with the magic-fetish view put forward by Mrs. Clinton and other practitioners of her simpleton politics. And there are more of them than you’d think: Those who obsess over marginal tax rates point to top income-tax brackets during the Eisenhower administration (91 percent!) and declare that that was the key to the golden postwar era. (Which looks a good deal less golden the more you know about it.) Their opposite numbers point to the fact that while theoretical top marginal rates were higher, actual taxes collected were lower and spending as a share of GDP was lower, too — a-ha! It wasn’t big taxes, it was small government! Some of my hawkish friends will note that between 1950 and 1957 we doubled military spending (from 4.9 percent of GDP to 9.8 percent of GDP) and ran a budget surplus. So maybe the key to national happiness is doubling military spending to the exclusion of most everything else in the federal budget — or, maybe, 2016 isn’t very much like 1957.
Maybe you think that Bill Clinton can turn around the U.S. economy because, as Mrs. Clinton insists, “he knows how to do it.”
If he does, why didn’t he tell President Obama?
— Kevin D. Williamson is the roving correspondent for National Review.